Cryptocurrencies are entirely decentralized blockchain-based platforms maintained by a peer-to-peer community instead of being governed by the central authority. These digital currencies are most secure because the process of mining verifies them.
Being so crucial in the development of countries, cryptocurrencies are growing across the world. In this report, we shall shed light on the Global adoption Index of cryptocurrencies and try to understand why digital currencies are crucial in building a better future.
The adoption of digital currencies is growing across the world. Global crypto adoption index is the measure of adoption of cryptos during the time of the survey. Its measurement is intended to know the countries where most people have moved their share of cryptocurrencies. It is measured by calculating the On-Chain cryptocurrency value received, the number of on-chain cryptocurrency deposits, on-chain retail value transferred, and peer-to-peer exchange trade volume. The top six countries in the Global crypto Adoption Index are Ukraine, Russia, Venezuela, China, Kenya, and the United States of America.
One important thing that we can analyze from the global crypto adoption index is that cryptocurrency activity is higher in developing countries. An excellent example of this is Venezuela. It represents that cryptocurrencies can be a perfect way to mitigate economic instability. According to the data, cryptocurrencies help Venezuelans preserve their savings because they use cryptos when their fiat currency loses value to inflation.
Venezuela was suffering through the worst economic crises with its national currency the previous year. The hyperinflation rates hit nearly 10,000,000%, making the Bolivar, the National currency of Venezuela, practically worthless. Although it used to be the wealthiest country of Latin America, inflation made it the most impoverished country with water shortages and blackouts.
Now, it seems practically impossible to recover from such a bad condition. But, the country is recovering by making use of cryptocurrencies. Are you wondering how? Let me tell you; Venezuela has the third-highest rate in the world’s usage of cryptocurrency. Most Venezuelans depend on digital currencies to preserve their savings.
Venezuela launched its crypto project to mitigate the poor economic conditions of the country. It started a crypto PETRO, which was backed by the oil reserves of the country. Apart from this, seven other cryptocurrency exchanges were permitted to operate in the country to facilitate the exchange of PETRO. Notably, users can also sell and buy other cryptos, including Bitcoin using these exchanges.
Why are cryptocurrencies important for the economy?
· Provides power to the Entrepreneurs- It was a time when doing business wasn’t much easier. But, with the development of blockchain technology, it is now easier for entrepreneurs to receive payments in more types of currencies. With the help of cryptos, even the small and medium business gets the better financial benefits across the world.
· Helpful to poorly banked countries- Not all the world population has access to banking services regarding their financing. With the help of technology, cryptocurrencies can now be available to the broader public and being decentralized; these provide the additional benefit to trade across the borders.
· Economic activities are rising- The crypto industry is growing faster, providing an opportunity for adopters to become rich and succeed financially. The use of cryptocurrencies is having a considerable impact on the economic status of the countries.
According to the reports, cryptocurrencies will significantly contribute to the Global GDP, and cryptos can lift the global GDP to $2 trillion by the end of 2030.